Medford v Nationwide News Pty Ltd
[2007] WASC 52
•9 MARCH 2007
MEDFORD -v- NATIONWIDE NEWS PTY LTD [2007] WASC 52
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 52 | |
| Case No: | CIV:1923/2006 | 14 FEBRUARY 2007 | |
| Coram: | MASTER NEWNES | 8/03/07 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | WESLEY DALTON MEDFORD NATIONWIDE NEWS PTY LTD (ACN 008 438 828) |
Catchwords: | Defamation Application to strike out pleaded imputations Whether imputations arguably capable of being conveyed Whether embarrassing Relevant principles Turns on own facts |
Legislation: | Nil |
Case References: | Buckeridge v Walter [2006] WASCA 22 Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519 Favell v Queensland Newspapers Pty Ltd [2005] HCA 52 Gumina v Williams (No 1) (1990) 3 WAR 342 John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50 Jones v Skelton [1963] 1 WLR 1362 Lewis v Daily Telegraph Ltd [1964] AC 234 Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663 Random House Australia Pty Ltd v Abbott (1999) 167 ALR 224 Taylor v Jecks (1993) 10 WAR 309 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
NATIONWIDE NEWS PTY LTD (ACN 008 438 828)
Defendant
Catchwords:
Defamation - Application to strike out pleaded imputations - Whether imputations arguably capable of being conveyed - Whether embarrassing - Relevant principles - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr J D MacLaurin
Defendant : Mr S M Davies
Solicitors:
Plaintiff : Christensen Vaughan
Defendant : Edwards Wallace
Case(s) referred to in judgment(s):
Buckeridge v Walter [2006] WASCA 22
Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519
Favell v Queensland Newspapers Pty Ltd [2005] HCA 52
Gumina v Williams (No 1) (1990) 3 WAR 342
John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50
Jones v Skelton [1963] 1 WLR 1362
Lewis v Daily Telegraph Ltd [1964] AC 234
Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663
Random House Australia Pty Ltd v Abbott (1999) 167 ALR 224
Taylor v Jecks (1993) 10 WAR 309
(Page 3)
1 MASTER NEWNES: This is an application by the defendant to strike out parts of the statement of claim, namely the defamatory imputations which the plaintiff pleads were conveyed by the words of an article published by the defendant.
The statement of claim
2 In the statement of claim, the plaintiff pleads, so far as relevant, that he is and was at all material times a businessman and a director of a number of proprietary limited and limited companies. It is alleged that in the edition of "The Sunday Times" newspaper of 20 August 2006, in an article entitled "Director to be sued", the defendant published the following words of and concerning the plaintiff:
"DUBIOUS Perth businessman Wes Medford is being sued for $3.5 million by the liquidators of one of his companies.
Mr Medford, who has 46 current and former directorships to his name, is accused of allowing Didasko Technologies Pty Ltd to trade while insolvent.
The WA-based company went into liquidation last year, owing $162,000 in superannuation to its employees and big debts including $800,000 owed to uranium explorer Paladin Resources.
According to the liquidator's statement of claim lodged in the New South Wales Supreme Court, Mr Medford was aware that Didasko was insolvent at the time numerous debts were incurred, between July 2003 and May 2005.
The liquidators are also suing another director, Andrew Horton, for $2.8 million.
Mr Medford, of Mandurah, has a controversial business background in WA.
Jailed former HIH director Rodney Adler tipped $500,000 into one of his businesses, which flopped, and small investors who mortgaged homes to raise capital claim they lost in deals with Mr Medford.
More recently, Mr Medford popped up as a director of Oriant, the major sponsor of the Perth Wildcats during the past two NBL seasons.
(Page 4)
- Oriant didn't get a product into the marketplace during the two years in which it ploughed $1 million into the basketball franchise. The source of those funds is unclear.
Oriant's other directors said Mr Medford was a non-executive director who was brought on board for investment or introductions.
By coincidence, Nick Marvin, the new Wildcats CEO brought in by new owner Jack Bendat, was the general manager of Didasko. He is understood to be a creditor and is leading the hunt for a new major sponsor.
Mr Medford also came to notice in 2000 over one of his earlier businesses, the Australian Academy of Business Development. The company was accused of using the staff and resources of a TAFE college to win lucrative contracts in 1997 and 1998 - in competition with other TAFE colleges.
In 2000, then opposition public sector standards spokeswoman Ljiljanna Ravlich raised the issue in Parliament, saying taxpayers had paid for everything, including the company's business cards, petrol and stationery for the 13 months it operated from the college's Bentley campus.
'It was supposed to be a joint venture, but as soon as the contracts began to flow in, AABD decided to take the money and run,' Ms Ravlich said at the time.
Auditor-General Des Pearson also criticised the arrangement in a report.
Mr Medford's new company Richmond Capital Group and another Medford outfit Ardent Capital have been raising and managing funds, but neither has an ASIC licence to do so.
Mr Medford did not return calls from The Sunday Times this week."
3 The plaintiff pleads that the article conveyed imputations that he:
(a) is a notoriously dishonest businessman by reason of having dishonestly swindled moneys from investors on a number of past occasions;
(Page 5)
- (b) is engaging in unlawful conduct by causing two of his companies to raise and manage funds without having the required ASIC licences to do so;
(c) unlawfully allowed one of his companies, Didasko Technologies Pty Ltd, to trade whilst insolvent, to the extent of rendering the plaintiff liable in the sum of approximately $3.5 million.
The defendant's submissions
4 It was submitted in relation to par 4(a) of the statement of claim that the imputation was not reasonably capable of arising from the article. There was no reference in the article to dishonesty. While "dubious" might mean doubtful or questionable, it does not mean dishonest, much less notoriously dishonest.
5 Counsel for the defendant argued that the references in the article to businesses with which the plaintiff had been associated had failed could not give rise to an imputation that the plaintiff had been guilty of dishonesty. Businesses commonly fail without any question of dishonesty on the part of anyone involved in them. In addition, the article does not refer to a number of past occasions on which investors had lost money. There is only a reference to investors having lost money on one occasion.
6 It was further argued that the use of the word "swindled" made the imputation embarrassing because it was too vague and did not adequately distil the defamatory sting which it is alleged the article conveyed.
7 It was submitted in relation to par 4(b) that the article was not capable of conveying an imputation that the two companies had acted unlawfully in raising and managing funds without having an ASIC licence. Counsel argued that the reference to neither of the companies having an ASIC licence could only convey an imputation that their conduct was unlawful if it appeared that raising and managing funds could only lawfully be carried out by the holder of such a licence. It was not apparent that an ASIC licence was required by law and a reasonable reader would not conclude that it was necessary to have one. It was well known that in some circumstances a licence to do something might be held but was not mandatory. Counsel gave the example of driving a motor vehicle on private property, where a driver's licence might be held by the driver but it was not necessary in order lawfully to drive a vehicle.
(Page 6)
8 It was also submitted that, again, the article does not adequately distil the defamatory meaning sought to be alleged. Counsel argued that it was unclear what was meant by "unlawful conduct" and that it does not adequately distil the defamatory imputation alleged to be conveyed.
9 In relation to par 4(c), it was argued that the article was not capable of conveying an imputation that the plaintiff in fact permitted insolvent trading. It was clear from the article that, although legal proceedings had been issued, the question of the plaintiff's guilt or innocence had not yet been determined. A reasonable reader would understand that it was no more than an allegation and could not therefore conclude that the plaintiff was guilty. Counsel argued that none of the other business activities of the plaintiff referred to in the article related to insolvent trading and there was therefore nothing which could give rise to an imputation of guilt. Counsel referred to the well-known case of Lewis v Daily Telegraph Ltd [1964] AC 234.
The plaintiff's submissions
10 In relation to par 4(a), counsel for the plaintiff argued that the complexion of the article was set by the opening word, "Dubious", which, in the context, would be understood by a reasonable reader as suggesting dishonesty. The article also describes the plaintiff as having "a controversial business background in WA".
11 After describing in some detail the accusations regarding Didasko Technologies Pty Ltd, the article then goes on to describe other failed or questionable business dealings, going back over a period of some six years, in which it is alleged the plaintiff had been involved. It does so in the context of his description as a "dubious" businessman having a "controversial business background". It refers to Mr Adler and small investors having lost money in deals with the plaintiff. The article as a whole suggests that the plaintiff is a notoriously dishonest businessman who has swindled investors in the past.
12 In relation to par 4(b), it was argued that a reasonable reader would understand the article to mean that an ASIC licence was required to conduct the business described and that the absence of such a licence meant that the two companies were acting unlawfully. The reference to the fact that neither company had a licence would be explicable to the ordinary reader only on the basis that it was a matter of such significance.
13 Counsel for the plaintiff argued that the imputation in par 4(c) has to be read against the overall impression conveyed by the article. While the
(Page 7)
- mere reporting of charges being laid or allegations being made is not sufficient to convey an imputation of guilt, it is clear that if the publisher goes further than a mere report of the charges or allegations, an imputation of guilt may well be conveyed.
14 In this case, having mentioned the allegations of insolvent trading, the article goes on to describe a series of other business dealings in which the plaintiff has allegedly been involved, and describes the plaintiff as a "dubious" businessman with a "controversial business background". That goes well beyond a mere reporting of the fact of the allegations being made. In the context, the fact that the other alleged business dealings of the plaintiff are not concerned with insolvent trading suggests that they have been included because they are relevant to an assessment of the plaintiff's guilt in relation to the insolvent trading complaint.
The relevant principles
15 I did not understand the relevant principles to be in dispute on the application. They are well established.
16 Imputations will be struck out at this stage if they are plainly incapable of being conveyed by the words complained of: Gumina v Williams (No 1) (1990) 3 WAR 342, at 346; Taylor v Jecks (1993) 10 WAR 309, at 319; or if, as framed, they would be likely to prejudice, embarrass or delay the fair trial of the action.
17 The principles to be applied in determining whether the defamatory imputations alleged are capable of being conveyed by the words complained of were discussed in the well-known passage from the judgment of the Privy Council in Jones v Skelton [1963] 1 WLR 1362 at 1370 - 1371:
"In deciding whether words are capable of conveying a defamatory meaning the court will reject those meanings which can only emerge as the product of some strained or forced or utterly unreasonable interpretation. In Capital and Counties Bank v George Henty & Sons [1882] 7 AC 741, 745 Lord Selborne LC said:
'The test, according to the authorities, is, whether under the circumstances in which the writing was published, reasonable men, to whom the publication was made, would be likely to understand it in a libellous sense.'
(Page 8)
- The ordinary and natural meaning of words may be either the literal meaning or it may be an implied or inferred or an indirect meaning: any meaning that does not require the support of extrinsic facts passing beyond general knowledge but is a meaning which is capable of being detected in the language used can be a part of the ordinary and natural meaning of words. See Lewis v Daily Telegraph Ltd [1963] 2 WLR 1063; [1963] 2 All ER 151 HL(E). The ordinary and natural meaning may therefore include any implication or inference which a reasonable reader guided not by any special but only by general knowledge and not fettered by any strict legal rules of construction would draw from the words. The test of reasonableness guides and directs the court in its function of deciding whether it is open to a jury in any particular case to hold that reasonable persons would understand the words complained of in a defamatory sense."
18 The person to whom it is alleged the words were spoken will be assumed to be a reasonable person, not unusually suspicious or unusually naive, nor avid for scandal. In Lewis v Daily Telegraph Ltd (supra), Lord Reid said (at 258):
"The ordinary man does not live in an ivory tower and he is not inhibited by knowledge of the rules of construction. So he can and does read between the lines in the light of his general knowledge and experience of world affairs."
19 In the same case, Lord Devlin said:
"When an imputation is made in a general way, the ordinary man is not likely to distinguish between hints and allegations, suspicion and guilt. It is the broad effect that counts and it is no use submitting to a judge that he ought to dissect the statement before he submits it to the jury … it is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also a fire …"
20 In Favell v Queensland Newspapers Pty Ltd [2005] HCA 52, Gleeson CJ, McHugh, Gummow and Heydon JJ at [6] referred with approval to Jones v Skelton (supra) and the judgments of Lord Reid and Lord Devlin in Lewis v Daily Telegraph Ltd (supra).
(Page 9)
21 The meaning that the ordinary person will attribute to words will often be a first impression. As such, when attempting to discern the meaning conveyed by words courts should avoid subjecting the words to an "over meticulous scrutiny": Random House Australia Pty Ltd v Abbott (1999) 167 ALR 224 at 257. In Lewis v Daily Telegraph Ltd (supra), Lord Reid observed (at 260) that the meaning attributed to words "must be a matter of impression" and Lord Morris (at 266) commented that it should not rest "upon any technical process of analysis or construction, nor upon a process of analysis or construction, nor upon a process of critical reading".
22 The meaning a reader gives to a newspaper article may be affected by matters such as the order in which things are dealt with, the language employed, the emphasis which is given to different aspects of it and the headlines which are used: John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50 per McHugh J at [26], Callinan J (with whom Gleeson CJ agreed) at [187]. It is therefore necessary to approach the exercise of determining whether the imputations are arguably capable of being conveyed with appropriate circumspection.
23 In terms of form, what must be clear from the pleading is the meaning the plaintiff contends was conveyed to a reasonable reader by the words complained of. That is, an imputation must specify what the plaintiff claims was "the precise act or condition asserted of, or attributed to" the plaintiff: Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663 and Taylor v Jecks (supra) at 319.
24 It is self-evident that the proper pleading of imputations in a defamation action is a matter of importance in ensuring a fair trial of the action. As Brennan CJ and McHugh J observed in Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519 at 531 - 532, where the plaintiff pleads a false innuendo the plaintiff gives a shape and focus to the cause of action.
25 But that is not to justify excessive zeal by defendants in pursuing the refinement of the pleaded imputations. In Buckeridge v Walter [2006] WASCA 22, the Court of Appeal (per Steytler P at [4], per Pullin JA at [23]) endorsed the comments of Kirby J in Favell v Queensland Newspapers Pty Ltd (supra), to the effect that excessive refinement of pleading issues is to be discouraged and courts should discourage, or minimise, the impediment to a fair trial presented by the process of "trial by interlocutory ordeal", which is especially prevalent in defamation proceedings.
(Page 10)
Is the statement of claim defective?
26 I will deal with each of the imputations in turn. The first is that pleaded in par 4(a), that the plaintiff is a notoriously dishonest businessman by reason of having dishonestly swindled moneys from investors on a number of past occasions. In determining whether such an imputation is capable of being conveyed it is, of course, necessary to have regard to the effect of the article as a whole.
27 The article commences with a description of the plaintiff as a "dubious" businessman. The word "dubious" must, of course, be read in its context. In this context it seems to me arguable that a reasonable reader would understand it in the second sense referred to in the Macquarie Dictionary, namely, "of doubtful quality or propriety; questionable". The article goes on to refer to the plaintiff as having a "controversial business background in WA".
28 The article goes on to describe the plaintiff as having "popped up" as a director of Oriant which "ploughed $1 million into the [Perth Wildcats] basketball franchise" without getting a product into the marketplace, the source of the $1 million being "unclear"; to describe one of the plaintiff's businesses as having been accused of using the staff and resources of a TAFE college to win lucrative contracts in competition with other TAFE colleges and then, when the contracts began to flow in, "[deciding] to take the money and run"; and to two companies controlled by the plaintiff raising and managing funds without an ASIC licence to do so.
29 The reference in the article to investors who claim to have lost money "in deals" with the plaintiff immediately follows the reference to the plaintiff's "controversial business background in WA". It is significant that "deals" is in the plural.
30 Having regard to the article as a whole, I do not consider it can be said that the imputation pleaded in par 4(a) is unarguable. In my view, it is arguable that a reasonable reader would understand it to bear the meaning alleged. There is, it seems to me, arguably enough smoke to suggest to a reasonable reader the presence of fire.
31 I do not consider that the use of the word "swindled" makes the imputation vague. As appears from the Macquarie Dictionary, it means "to cheat", "to obtain by fraud or deceit". In the present context I do not consider that it renders the imputation embarrassing. Nor do I consider that the imputation fails to distil the defamatory meaning contended for.
(Page 11)
32 I do not accept the defendant's submissions in relation to the imputation pleaded in par 4(b). In my view, it is clearly arguable that the statement in the article that the two companies had been raising and managing funds although "neither has an ASIC licence to do so", would be understood by a reasonable reader to mean that they were doing so unlawfully. I also consider that the imputation sufficiently distils the defamatory meaning contended for.
33 In relation to par 4(c), it is, of course, well established that a mere statement that a person has been charged with, or accused by a relevant authority of, an offence is incapable of conveying the imputation that the person has in fact committed that offence. But as Gleeson CJ, McHugh, Gummow and Heydon JJ pointed out in Favell v Queensland Newspapers Pty Ltd (supra), while a mere statement that a person is under investigation, or that a person has been charged, may not be enough to impute guilt, if it is accompanied by an account of circumstances that point towards a likelihood of guilt, then the position may be otherwise. Their Honours observed (at [14]), that an article which gives otherwise irrelevant prominence to the existence of smoke may be found to suggest the existence of fire.
34 I have earlier mentioned the references in the article to the plaintiff as a "dubious" businessman and one who has a "controversial business background" and, following a description of the insolvent trading proceedings that had been instituted, the comparatively extensive discussion of the alleged history of apparently unrelated business activities of the plaintiff going back over a number of years. The larger part of the article is concerned with those matters, which appear to be irrelevant to Didasko Technologies Pty Ltd or the legal action by the liquidators, apart from the common element of the plaintiff's involvement.
35 When read as a whole, I consider it is arguable that a reasonable reader would understand the article to be doing more than merely reporting the fact that the liquidators alleged the plaintiff had engaged in insolvent trading; rather, it was suggesting that the allegations were well founded.
36 I would dismiss the defendant's application.
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